Gilroy
– The county assessor released more evidence Thursday that South
County houses are rapidly escalating in value and that things are
looking up for commercial property owners.
Gilroy – The county assessor released more evidence Thursday that South County houses are rapidly escalating in value and that things are looking up for commercial property owners.
The number of Santa Clara County properties assessed this year at a value lower than their purchase price declined drastically. In total, there are 4,500 properties assessed at $9.5 billion less than what their owners paid for them.
“It is good news and bad news,” County Assessor Larry Stone said. “For residential property owners, the market has clearly turned the corner. For commercial and industrial property owners, the worst appears to be over.”
Three thousand of the 4,500 properties are residential lots, but the commercial property accounts for more than 90 percent of the temporary reduction in assessed value. Last year 23,000 residential lots were reduced and the total reduction was $10.6 billion.
In Gilroy, there are 64 properties devalued by more than $20 million. In Morgan Hill, there are 84 properties worth $69 million less than their purchase price. Last year there were 669 such properties in Gilroy devalued by $30 million.
Lowered assessments are based on declining values in certain sectors of the real estate market. The trade off for property owners is a lower tax bill. Proposition 13 caps the annual upward tax adjustment at 2 percent a year, but once a property returns to a value above what was paid for it, the annual adjustment returns to a figure based on the purchase price, and not the temporary reduced assessment.
